Highly-discounted houses may still be too expensive
What is the correct asking price for a property in Spain that you want to buy? You can find out.
Market value without inflated prices
The market value of a property is now around the price level that it was in 2001/2002. In the following period, the market prices were inflated. Now, you should disregard that increase.
The correct calculation
Always try to calculate a realistic price with all the air of the ‘price bubble’ from the period 2001 to the end of 2007 taken out.
See the chart below, in this article.
Remember, a towering discount may still result in a price that is too expensive. How do you get to the right price?
• Obtain a copy of the deeds from the seller
• Check similar properties in the immediate area.
• Many agents have records of the prices from that period. Ask them.
You can also get a lot of information from the many Spanish statistics. The disadvantage is that you need to know Spanish well in order to understand them.
Figures from the Spanish Agency of Statistics ( INE )
- House price adjustments to the Spanish coasts. (Spanish Ministry of Housing and Welfare)
The strongest performers are Calpe and Marbella. - Price movements averaged over the whole of Spain (Spanish Ministry of Housing and Welfare)
- House price decreases by province over Spain (Spanish Ministry of Housing and Welfare)
Regions of Guadalagara, Alicante and Murcia are the weakest performers. - Statistics and figures from the Spanish notary.
- Index of inmo50 from
Value for immediate sale.
Sellers who want to force a quick sale more often ask the assessed value for an immediate sale.
This is a valuation on the price level of 2002/2003 less 15 to 20%. This is the price to within the last 3 months, to effect a sale.
Banks use this kind of regular appraisal to revalue their property portfolio.
* For a potential buyer, you can also obtain a valuation from a professional agency or broker.
The houses in Spain are now priced like offers in the supermarket.
Now reduced in price from .. for ..
Highly discounted houses may still be too expensive.
A towering discount on a property does not mean that the house is priced correctly. What is it important if the starting point for the price.
Highest price level as a starting point.
Spanish banks, in their ads, usually apply the price at the highest point.
The highest point is the price level at January 2007. Measured from
the highest point gives them enticing high discounts.
Price evolution of 1st quarter 1999 to 3rd quarter 2013.
In the run up to Euro Exchange, house prices shot into the air in all European countries. That is, until mid-2007, when it appeared for the umpteenth time that trees do not grow to the sky in house-price land. Only Germany remained with both feet on the ground, and they are now reaping the rewards. (1st quarter 1999, starting from the chart below)
Line colors:
Belgium - dark green
England - blue
Germany – light green
Netherlands – mid green
Spain – yellow
You can see from the graph so that an owner who wants to sell to you, and bought after 2003 is going to lose money, so he’ll want to make a deal.
If he has bought at the time of pesets, the pain threshold for the vendor is lower and you can definitely do business.
Link directly to the chart at economist.com . Here you can add your own country and adjust periods since 1975.
Overall.
You have to start at the beginning and buy at a price where all the inflation over the years has crept out again. Maybe not easy, but it pays off.
